Post Office network ‘close to collapse’ with more than 2,500 branches threatening closure

The Post Office network is on the brink of collapse with more than 2,500 branches facing closure in the next 12 months, MPs have been warned.

More than a fifth of sub-postmasters, who run the Post Office franchises across the UK, have said they plan to resign or downsize because of increasing financial pressures.

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Why are post offices closing?

A report from industry body National Federation of SubPostmasters (NFSP) said that the resulting loss of services, particularly in rural areas, would have ”catastrophic” implications for local communities.

It comes as the government prepares to end its subsidy of the Post Office network in 2021.

The NFSP has called on the government to reconsider this decision and guarantee the subsidy beyond 2021, as well as making it “rural proof” to protect vital village branches.

“Catastrophic loss to communities across the UK”

NFSP chief Calum Greenhow said: “The viability of sub post offices and the morale of subpostmasters has been eroded to the extent that the network’s resilience is extremely limited. We believe a tipping point has been passed and the consequences of this are now being realized.

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“Sub-postmasters are resigning in high numbers because it is increasingly difficult to make a decent living. The closure of 2,500 post offices in a year would be a catastrophic loss to communities across the UK”.

A survey last month found that 76 per cent of sub-postmasters - who run 98 per cent of the franchised offices in the UK - work for less than the minimum hourly wage.

‘Digital first’ policy blames by industry body

The NFSP blamed the “digital first” approach by ministers for the sharp decline in revenue for Post Offices since 2005.

The report, given to the Business, Energy and Industrial Strategy select committee, revealed that revenue from providing Government services such as DVLA forms has collapsed from £576 million in 2005 to just £99 million in 2018.

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And it says Royal Mail appears more interested in dealing directly with the public through their website than supporting the brick-and-mortar network.

The Department for Work and Pensions are also encouraging users of the Post Office card account to switch to using a bank account, according to the report.

‘Disenfranchised’ and ‘marginalised’ postmasters are quitting

Yet The NFSP said its members were increasingly important to villages and neighbourhoods as banks shut more branches.

It called on MPs to allow the Post Office to handle a wider range of Government and banking services.

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The NFSP says its 8,000 members feel ‘disenfranchised’, ‘marginalised’ and ‘relegated to the bottom of the food chain’ by the Post Office, the government and Royal Mail.

Around 1,000 branches are currently listed as closed. The report said that two thirds of these closures were caused by the resignation of the sub-postmaster.

A further 2,500 are at risk of closure over the coming months. 22 per cent of sub-postmasters have told the NFSP that they are planning to close or downsize their office in the next year.